5 INVEST IN BELGIUM Belgium as your preferred location for Europe Parent company Low effective tax rate Holding regime Belgium company Gateway to Europe How to repatriate cash to Turkey? EU company EU branch How to finance activities in Belgium? Ruling practice EU company EU company

7 1. Notional Interest Deduction What is it? A notional interest calculated and deducted yearly from the taxable basis used to off-set operational or financial income (thus lowering effective tax rate)

10 1. Notional Interest Deduction «Qualifying» equity Equity = total equity as defined under Belgian GAAP (includes retained earnings) in the opening balance sheet of the taxable period adjusted to avoid double use and abuse.

11 1. Notional Interest Deduction Interest Rate RATE = annual average of the monthly published rates of the long term Belgian Government Bonds (10-year OLO) of the months July, August and September of the penultimate year prior to the tax year Fixed yearly for 2014 (Tax Year 2015): 2,63% (3,13% SME s)

16 2. Tax Ruling Advanced decisions or ruling is about creating CONFIDENCE to invest in Belgium; The investor describes the facts, allowing the tax administration to determine, in advance, how the tax laws are to be applied on a CASE BY CASE BASIS It ensures a LEGALLY BINDING ACCURATE FORECAST of all the tax implications of your investment project

18 2. Tax Ruling Characteristics of the Belgian ruling Ruling on all kind of taxes (Corporate, Personal, VAT,..) Case-by-case ruling in a new open culture Legal certainty for investors In accordance with international rules Open to potential AND existing investors Legally binding for a 5 year renewable period Economic substance required

20 2. Tax Ruling Examples of matters that can be cleared in advance: Transfer pricing issues Cost plus 3 to 4% ruling for European Distribution Center (EDC) Cost plus 4 to 5% ruling for Service Sharing Center (SSC) Excess profit ruling determining the amount of excess profit that can be excluded from the Belgian taxable profit Taxable presence or not in Belgium? In the hands of the foreign principal of a Belgian manufacturer or sales function In the hands of the service recipients of a EDC or SSC Personal tax issues Amount of tax-free lump sum allowances for personnel VAT issues Tonnage tax regime for shipping

23 2. Tax Ruling Excess profit ruling Art. 185 &2, b) Income Tax Code Exclusion of «excess profits» from Belgian taxable basis: Belgian Company may exclude from its taxable income those profits would not have been realized in a «stand alone» situation; Cost structure and profit potential of group member is different from a stand-alone entity Use of intangibles of the group: Profit differential comes from the use of intangibles of the group: «Excess profits» may be generated by synergies (economies of scale) and/or the benefit of intangibles: management skills, access to new markets, clients ans suppliers network, reputation,.., which are free for disposal to the Belgian entity

24 3. Unique tax features for R & D 1/ Patent income deduction What is it? Deduction of 80% of the income from patents from the taxable basis, resulting in an effective tax rate of maximum 6,8% on this income Who can benefit? Belgian companies and Belgian establishments of foreign companies

26 3. Unique tax features for R & D 1/ Patent income deduction Patents concerned self-developed or co-developed by a Belgian company or branch; acquired by a Belgian company or branch provided they are being further developed in Belgium or abroad (by acquisition, or license, ) Large companies must have in-house R&D activities in a R&D center that qualifies as branch of activity As of 1 January 2013 SME s are exempted from the R&D center requirement

27 3. Unique tax features for R & D 1/ Patent Income Deduction Calculation of the deduction For patents that are licensed: 80% of the patent income received, to the extend the income is at arm s length For patents that are used in the production process: deemed deduction of 80% of the at arm s length royalty that would have been received had the patents been licensed to unrelated third parties

30 3. Unique tax features for R & D 2/ Investment deduction for R&D related inv. and patents Investment deduction for R&D related investments: for assets which aim to promote R&D of new products and advanced technologies which are environment-friendly : deduction of 13,5% on the investment value (in one shot) OR 20,5% on the annual depreciation (spread deduction) Investment deduction in patents acquired or self-developed by the company deduction of 13,5% on the investment value NB: In case of insufficient profits, deduction carried forward for an unlimited period.

31 3. Unique tax features for R & D 3/ Exemption from withholding tax on the remunerations of researchers, in favour of employers Principle: the salary withholding tax is normally retained on the remunerations paid to the researcher, but the amount of tax so retained must not be totally paid to the Revenue Collector (= extra financial means for the employer) 80% exemption For researchers with a specific degree, engaged in R&D program (introduction of a reporting obligation as of 1 January 2014)

32 4. Dividend withholding tax exemption Conditions to benefit be resident in a country with which Belgium has concluded a double tax treaty; the beneficiary holds a participation of at least 10% in a Belgian subsidiary, for an uninterrupted period of at least 12 months = low participation threshold;

38 6. Expatriate status For employers: No tax, no social security contributions on expatriate allowances and reimbursement of expenses Deductible from Corporate tax

39 7. General employment incentive Partial exemption of payment of the withholding tax on the remunerations of workers in team work or night shifts Principle: the withholding tax is normally retained on the monthly remuneration paid to these workers, but the amount of tax so retained must not be totally paid to the Revenue Collector (= extra financial means for the employer) Exemption of payment of WHT of the taxable remunerations of those workers

40 6. General employment incentive Exemption of a. 15,6% in ,0% in 2015 In case of night work or shiftwork based on a number of teams from 2 upwards b. 17,8% in ,2% in 2015 in case of 24/7 continuous shiftworking based on 4 teams upwards

Belgium in international tax planning Presented by Bernard Peeters and Mieke Van Zandweghe, tax division at Tiberghien Belgium has improved its tax climate considerably in recent years. This may be illustrated

Introduction Monaco is a sovereign principality. France is a guarantor of the sovereignty and territorial integrity of Monaco, while Monaco is to conform to French interests. Although the Prince is the

The Netherlands, with a historically strong economic financial climate, is traditionally an important gateway to Europe. Situated in the western part of the European continent with its world leading Rotterdam

Country Tax Guide www.bakertillyinternational.com Country Tax Guide Germany Corporate Income Taxes Resident companies, defined as companies which are legally constituted in Germany, or which are legally

TAX GUIDE BELGIUM DISCLAIMER This document is for guidance only. Professional advice should be obtained before acting on any information contained herein. Last up date : December 2010 1 1. INDIVIDUAL INCOME

The UK as a holding company location Tax May 2013 kpmg.com A key ambition is to create the most competitive tax system in the G20. As well as lowering tax rates, the Government wants to make the UK the

Holding companies in Irel David Lawless Paul Moloney Dillon Eustace, Dublin Irel has long been a destination of choice for holding companies because of its low corporation tax rate of 12.5 percent, participation

TURKEY CORPORATE TAX (KURUMLAR VERGISI) The basic rate of corporation tax for resident and non-resident companies in Turkey is 20%. Corporations in Turkey can be regarded as either limited or unlimited

Turkey is located as a bridge between two continents and in close proximity to Europe, the Middle East and the Caucasus. The proximity to the Balkans and the rest of Europe as well as to the growing emerging

Withholding Tax The Indian Constitution has empowered only the Central Government to levy and collect taxes. Every person whose total income exceeds the maximum exemption limit shall be chargeable to the

14. Corporate Tax and Depreciation Corporate income tax is levied on income from the worldwide operations of Czech tax residents and on Czech-source income of Czech tax non-residents. Czech tax residents

APPENDIX 14 Incorporating International Tax Laws in Multinational Capital Budgeting Tax laws can vary among countries in many ways, but any type of tax causes an MNC s after-tax cash flows to differ from

INFORMATION SHEET No. 126 Malta in International Tax Structuring February 2015 Introduction Malta is a reputable EU business and financial centre with an attractive tax regime and sound legislative framework.

INVESTING IN INDIA OR THE UNITED STATES OF AMERICA THROUGH THE NETHERLANDS Tax Alert April 2013 i Tel +31 I. (0)88 Introduction 2001300 Cell +31 (0)6 M The Netherlands is an attractive and advantageous

TAXATION OF INTEREST, DIVIDENDS AND CAPITAL GAINS IN CYPRUS LAWS AND DECREES The Income Tax (Amendment) Law of 2005 The Special Contribution for Defence (Amendment) Law of 2004 The Assessment and Collection

Sharing its capital within the European Union, Belgium is one of the smaller European countries in terms of size. Nevertheless, Belgium is a very dynamic country with multilingual, multicultural influences.

Coming to America U.S. Tax Planning for Foreign-Owned U.S. Operations September 2015 Table of Contents Introduction... 2 Tax Checklist for Foreign-Owned U.S. Operations... 2 Typical Life Cycle of Foreign-Owned

Quality tax advice, globally GLOBAL GUIDE TO M&A TAX 2013 EDITION www.taxand.com CYPRUS Cyprus From a Buyer s Perspective 1. What are the main differences among acquisitions made through a share deal versus

An Introduction to Taxation in Indonesia November 2012 Steven Solomon Contents 1. Introduction 2. Key facts about the Indonesia tax system 3. Investing in Indonesia 4. Trading with Indonesia 5. Using the

A Comparison of Key Aspects of the International Tax Systems of Major OECD and Developing Countries Prepared for Business Roundtable May 10, 2010 This document has been prepared pursuant to an engagement

Expanding into Brazil Support for your Business kpmg.ie Expanding into Brazil 1 Are you looking to expand your business into Brazil? Dynamic Irish businesses are looking to new markets to expand and grow.

14. Corporate Tax and Depreciation Corporate income tax is levied on income from the worldwide operations of Czech tax residents and on Czech-source income of Czech tax non-residents. Czech tax residents

December 2013 ENCHANCING PORTUGUESE CORPORATE TAX REGIME The Parliament has approved the Portuguese Corporate Income Tax Reform. This Reform, which follow largely the recommendations of the Reform Commission,

Briefing Overseas investments by Brazilian corporations Summary In this briefing we look at how the Austrian and Spanish domestic tax regimes for holding companies may be relevant when structuring international

BLUM Attorneys at Law CORPORATE TAXATION SYSTEM IN SWITZERLAND Outline of Swiss Corporate Tax System Levels of Taxation in Switzerland Resident companies are subject to: federal corporate income tax, and

Intellectual Property Management Why Luxembourg is a good idea Introduction In today s economy knowledge is king and it is more and more common that it is a group s intellectual property that forms the

DOING BUSINESS IN GERMANY Overview on Taxation March 2015 1. Introduction 1.1. Generally, taxes are administered and enforced by the competent local tax office. These local tax offices administer in particular

Film Financing and Television Now in its seventh edition, KPMG LLP s ( KPMG ) Film Financing and Television (the Guide ) is a fundamental resource for film and television producers, attorneys, tax executives,

SYLLABUS BASICS OF INTERNATIONAL TAXATION! States levy taxes by virtue of their sovereignty! Tax sovereignty, however, is not unlimited. There must either be a personal or an objective connection between

The Company Tax System in Malta Maltese companies are subject to tax at 35% Malta s tax system adopts a full imputation system Effective system for relief of double taxation Compliant with EU law Maltese

Chapter Avbreht, Zajc & Partners Ltd. Ursula Smuk 1 General: Treaties 1.1 How many income tax treaties are currently in force in? 44 income tax treaties are currently in force in. 1.2 Do they generally

INTERNATIONAL EXECUTIVE SERVICES Thinking Beyond Borders Tanzania kpmg.com Tanzania Introduction Taxation of individuals under the Income Tax Act 2004 (ITA) is on the basis of both residence and source.

Hong Kong Taxation FUNDS AND FUND MANAGEMENT 2010 3.1 Taxation of funds Funds, like other entities, are prima facie subject to Hong Kong tax (currently at the rate of 16.5 percent for the 2009/2010 year

Saudi Arabia Tax Guide I IMPORTANT DISCLAIMER: No person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining

Corporate Taxation System in Taiwan Corporate Income Tax The amount of income of a profit-seeking enterprise shall be the net income, i.e., the gross yearly income after deduction of all costs, expenses,

Taxation of cross-border mergers and acquisitions Belgium kpmg.com/tax KPMG International Taxation of cross-border mergers and acquisitions a Belgium Introduction Following the implementation of various

An overview of using Hong Kong as a platform for trade and investment with China Daniel Booth Director Vistra (Hong Kong) Breda May, 2012 The role of Hong Kong A recognized and respected jurisdiction for

Bulgaria is a parliamentary republic situated in the heart of the Balkan Peninsula at the south - east part of Europe. It is a member of NATO since 2004 and of the European Union since 2007. The territory

US Protocol amending the Australia-USA double taxation convention 1. Specification of policy objective The key objective in updating Australia s tax treaty with the United States is to make a significant

Malta launches patents exemption Background The Maltese government published regulations for the application of an exemption from corporate tax on royalties (and similar income) derived from qualifying

Your partner in Hong Kong About our firm Midland Consult (Hong Kong) Limited, was set up in 2009 and it s a subsidiary which forms a part of Midland Group of companies a highly skilled professional corporate

The Expatriate Financial Guide to Spain Spanish Tax Facts Introduction Tax Year Assessment Basis Taxation in Spain occurs at a national level and at a regional ( Autonomous Community ) or municipal level.

Tax l Accounting l Audit l Advisory Company Formation in Austria When considering an investment abroad thought must be given to taxation of income received as dividends and interest as well as any capital

A E B D C 03 continued PAPER F1 FINANCIAL OPERATIONS Syllabus overview The core objectives of Paper F1 are the preparation of the full financial statements for a single company and the principal consolidated

The United Kingdom (UK) continues to be one of the world s leading locations for global investment, being rated again as the most attractive place in Europe for foreign investment. i Also, the World Bank

THE MADEIRA INTERNATIONAL BUSINESS CENTRE MADEIRA COMPANY INFORMATION A GENERAL OVERVIEW The Madeira International Business Centre (MIBC) is an established and important international business hub, wholly

MEXICAN TAX BILL FOR 2016 On September 8, 2015, the President sent to Congress the Tax Bill where some proposals are made to change current Mexican tax legislation. The main proposals are the following:

Bartosz Bacia Implementation of the EU tax directives in Poland Since Poland joined the EU on May 1 2004, Polish tax law need to be adapted to the EU Council directives for the member states. The new legal

IE Singapore iadvisory Seminar Doing Business in Japan: General Overview of Taxation in Japan KPMG Tax Corporation March 12, 2013 Overview of Japanese tax (1/4) In general, a high tax jurisdiction Primary

PART OF THE LEHMAN TAX LAW KNOWLEDGE BASE SERIES United States Taxation Of Investors U.S. Taxation of Foreign Investors Non Resident Alien Individuals & Foreign Corporations By Richard S. Lehman Esq. TAX

Argentina boasts many natural resources, qualified human resources and the synergies deriving from our commercial partnership with countries like Brazil make it an attractive country in which to invest.